In this week’s round up of the big news in digital media and technology, a look at how Google’s vision of the future of TV is becoming clearer, update on Virgin’s growing TiVo and VOD platforms, GfK say online ads ROI beats TV, and more views on the growing importance of mobile.
### Google’s TV developments
Eric Schmidt’s MacTaggart lecture in August touched on how Google saw themselves getting involved with — but not competing with — the TV industry;
Some have suggested Google should invest directly in TV content. To argue that misunderstands a key point: Google is a technology company. We provide platforms for people to engage with content and, through automated software, we show ads next to content that owners have chosen to put up. But we have neither the ambition nor the know-how to actually produce content on a large scale….But of course we are helping to fund content.
While the lecture was seen as an “olive branch” to the TV industry, Google’s vision of the future of TV became a little clearer this week with two new developments.
Firstly — as the last line in that quote perhaps hinted at — YouTube has announced [more than 100 new channels](http://www.youtube.com/creators/original-channels.html), featuring exclusive content commisionned from media companies and celebrities. [BusinessInsider.com says](http://www.businessinsider.com/google-launches-more-than-100-exclusive-youtube-channels-2011-10) that more than $100m was paid in advances, which artists will be able to earn back over time through ad monetisation (a similar model to record labels paying artists.)
Some big names are in that long list- on the media side, ranging from traditional media brands (Thomson Reuters, Wall Street Journal, Hearst Magazines, Lionsgate) to the online (The Onion, Demand media, IGN Entertainment) through to some interesting producers; the WWE, Jay-Z, Madonna with a dance channel, Shaquille O’Neal with a comedy channel.
But that’s all within YouTube — how does that affect the world of the TV screen, being watched from the sofa? Well, the release of [Google TV 2.0](http://googletv.blogspot.com/2011/10/update-on-google-tv.html) — a free software update to existing owners, preceeding an expected UK launch next year.
Responding to criticisms of the platform, the revamped Google TV sounds more “TV” than “PC”, with a simplified user interface, making it easier to find content with a new “TV & Movies” app, aimed at browsing rather than searching with content arranged by category, so users don’t need to know what source its coming from (ie. whether its a Netflix film or a YouTube clip) — although live TV sits within a special “Live TV” channel. The guide will also (for those who opt-in) use past selections to guide future suggestions; something already seen in software from TiVo, amongst others.
Other new features include better integration with YouTube (any topic can effectively be turned into a channel thanks to closer integration with YouTube search), and the opening up of TV applications to the Android app market.
It is still not entirely clear view on how Google plan to monetise the platform, other than fitting into Google’s general strategy of getting users online from as many places as possible. Today, it sits between the “traditional” set top box and the TV set, so users will still be able to watch their Sky/Virgin/Freeview content “through” (rather than “on”) Google TV. It seems like there could be an interesting opportunity there for Google to link their platform to regular advertising (perhaps as an overlay on top of the TV feed, or through connecting Google TV with other networked devices like smartphones or tablets.) At the moment, it is simply speculation — likely to depend as much on keeping their content-creating partners happy as the technological challenges of building a bridge between the TV viewing environment and the response-friendly nature of online.
### Virgin Media TiVo hits 222,000 homes
Virgin Media’s [financial results (PDF link)](http://investors.virginmedia.com/imagelibrary/downloadmedia.ashx?MediaDetailsID=1239) released this week might show what Google’s on-demand platform will have to compete with first of all. With 220,000 homes now equipped with their TiVo set-top box (up from 162,900 at the end of Q3) with “rapid growth expected in the coming quarters, reinforced by the introduction of TiVo apps for mobile and tablet devices.”
An impressive 40% of these TiVo adopters were new subscribers — it has been speculated that Virgin will begin pushing the new TiVo boxes out to existing customers in late 2011/early 2012, probably as competing platforms like Google TV and YouView start to appear on the market.
Also, encouragingly for these new platforms, Virgin report that VOD consumption on their own platform is still rising. Although the average VOD views in homes who use it has been fairly steady, monthly reach of VOD services is now at roughly two thirds of the Virgin Media TV base. With 165,000 new HD subscribers, Virgin’s HD penetration is now almost half of their TV households at 49%- well up on Sky’s 103,000 (38% penetration), no doubt thanks in part to Sky’s monthly surcharge for HD subscribers.
### [GfK say online advertising ROI exceeds TV](http://www.gfknop.com/pressinfo/releases/singlearticles/008891/index.en.print.html)
GfK’s Media Efficiency Panel has, in partnership with Google, been evaluating a number of FMCG campaigns to measure cross-media advertising’s effects on (short-term) shopping behaviours, and assess the return on marketing investment. This week, they have released some of their key findings;
* Online is on average more efficient than offline at delivering short-term sales ROI, with average ROI of 75p for all online activity compared to 66p for press, 53p for outdoor and just 43p for TV.
* Online video outperforms other online formats, with an average ROI of 81p — and for ads on YouTube, that was 84p.
* Online now competes with press and outdoor when it comes to reach. Digital campaigns reach on average 33 per cent of the online population while press reaches less than 40 per cent and outdoor just 30 per cent.
* Online consistently delivers higher sales uplift than offline. Average uplift on a single contact with an online ad was nine per cent, compared to six per cent for outdoor, seven per cent for TV and eight per cent for press. Google Search proved the biggest driver (41 per cent).
They also revealed that digital campaigns are providing significant incremental reach to TV advertising, with a minimum of 25 per cent of consumers exposed to at least one online ad never exposed to the corresponding TV ads, and 46 per cent of those exposed to ads on YouTube and other online videos having no contact with the corresponding TV ads.
The full report is [available on GfK's website (PDF link)](http://www.gfknop.com/imperia/md/content/gfk_nop/impact_of_online_advertising.pdf)
### Smartphones and Tablets drive nearly 5% of EU’s digital traffic
ComScore’s figures [published this week](http://www.comscore.com/Press_Events/Press_Releases/2011/10/Smartphones_and_Tablets_Drive_Nearly_5_Percent_of_Digital_Traffic_in_EU5) reveal that nearly 5% of the EU’s online page views are being viewed on smartphones and tablets.
Apple iOS is the biggest platform, with 30.5% of device in use – nearly half of which is non-phone devices (iPads and iPod Touches.) Android accounts for 23.5% of devices – but 84% of them are phones. More notable is the different platforms’ share of web traffic – Apple’s iOS platform accounting for 61.1%, with Android at 20.9% and Symbian at just 2.7% — despite accounting for 29% of devices.
(This compares to [figures from the US](http://www.comscore.com/Press_Events/Press_Releases/2011/10/Smartphones_and_Tablets_Drive_Nearly_7_Percent_of_Total_U.S._Digital_Traffic), where where Symbian is almost non-existent (relegated to part of the the 7.8% of “others”) and iOS has a larger share of devices, but a smaller share of total digital traffic.)
Looking at the activities people are doing with their phones, compared to the other 4 big EU markets, UK’s are ahead in everything except for listening to music.
Hopefully, our business will be leading the way as much as our consumers because, once again, big things are forseen for mobile platforms;
### [50% of web sales via social & mobile apps by 2015](http://www.gartner.com/it/page.jsp?id=1826814)
Big predictions from Gartner, as they lay out the challenges that e-commerce organisations will have in dealing with the transition towards social and mobile. Today, they say that e-commerce organisations need to scale up their operations to deal with the growing numbers who don’t want to wait until they are in front of a PC to ask questions or place orders. But as e-commerce platforms become context-aware, new mobile shopping solutions will be offered to consumers who will have increasing expectations of what businesses should offer to them on mobile platforms.
Gene Alvarez, research vice president at Gartner explains;
“Customers are clamoring for new and easy ways to interact with the organizations they deal with, and no company should think itself immune to this new business dynamic. […] As more people use smartphones, they will expect an extension of their customer experience to be supported by this kind of device while demanding that social aspects of the Web be intertwined with this experience. At the same time, organizations are looking toward new countries and regions for growth. As a result, it is time to take a fresh look at your organization’s Web sales capabilities to ensure that social software, mobile technology and globalization are part of your organization’s online future.”
Gartner also predict that in just 2 years time, 80% of online sellers in the USA and Europe will expand into Brazil, Russia, India, Africa, Japan or China.
That’s a big “or” — but 80% is still a big number for a short space of time…